There are many discussions in various forums (fora for the UK English fetish people!) about the logic in investing directly and not going through an agent.

Let us see what an agent is supposed to do:

– be able to articulate your goals

– tell you which goal is realistic and what is not

– choose the funds in which to invest and do the documentation.

Can you not do it yourself?

Of course you can. Depends on whether you have the inclination to do so. One prof in IIT who is a full time Physics professor does it. Three or four scientists I know do a brilliant job of direct investing in equities. One CEO of a very big engineering company used to do it till about 7 years ago. When he got a job in the corner office, he just does not find time, so it is now outsourced.

I know these people. They all have high IQs and a tremendous love for balance sheets. The CEO can talk about all industries as comfortably as he can talk about his own engineering company. Amazing analyzing skills – he is also from IIT, but much senior to Pattu and in a different stream!

DOES NOT MEAN EVERYBODY CAN DO IT.

Do it, if you have the following characteristics:

1. Willingness to do PRIMARY research based on data given by mutual funds.

2. Knowing to separate the wheat and the chaff in the mainstream media

3. Using past performance as a guide, FOR STYLE not for NUMBERS.

4. Understanding tax implications of switches, redemptions, etc.

5. WILLINGNESS to read a lot about mutual funds, investor behaviour, etc.

6. Ruthless performance appraisal (frankly this is the toughest thing to do.

I could just go on and on. So if investing is NOT your hobby (and you do not enjoy going through Subramoney.com or freefincal.com. If your hobby is travelling, running, cycling and photography, find time for all that.

My sister loves to plan trips – all her trips are well planned and well executed. I do not enjoy doing the planning. So when she plans a trip, I happily tag along. The alternative is to go to a travel agent and ask him to plan. For a fee, I am sure.

Trying to go direct because one prof. from IIT is doing it is ridiculous. It is like watching Ben Kingsley act and thinking that YOU have become Gandhiji. Even Ben was only acting.